Chennai Port Trust Employees’ Co-Operative Bank Ltd. v. DCIT (2018) 65 ITR 1 (SN)(Chennai) (Trib)

S. 37(1) : Business expenditure -Fines and penalties — Levy of penal interest by Reserve Bank of India for failure to maintain statutory liquidity ratio is entitled to deduction in Assessment year in which liability is crystallised.

  1. 37(1) : Business expenditure –Fines and penalties — Levy of penal interest by Reserve Bank of India for failure to maintain statutory liquidity ratio is entitled to deduction in Assessment year in which liability is crystallised.

Tribunal held that , levy of penal interest by Reserve Bank of India for failure to maintain statutory liquidity ratio is entitled to deduction in Assessment year in which liability is  crystallised. liability to incur the expenditure had crystallised only on January 28, 2014 relevant to the assessment year 2014-15, i. e., on the date of the letter of intimation by the Reserve Bank of India. Therefore the assessee was entitled to deduction.  ( AY. 2014-15)